bims presentation bahrain jul04 jdp

Slide1: Business Integrity Management System (BIMS) Kingdom of Bahrain Ministry of Works and Housing Seminar on Anti-Corruption and Integrity Management, June 2004 Dr. Jorge Díaz Padilla Vice President, FIDIC
The FIDIC Vision: The FIDIC Vision “To be the recognized global voice for the consulting engineering industry”.
The FIDIC Mission: The FIDIC Mission “To improve the business climate and promote the interests of consulting engineering firms, globally and locally, consistent with the responsibility to provide quality services for the benefit of society and the environment”.
The founding of FIDIC: The founding of FIDIC FIDIC was founded in July 1913 as the result of an invitation by Belgian and French engineers to attend “le Premier Congress International des Ingénieurs-conseils et Ingénieurs-experts”. Participants to the 1913 Congress in Ghent, Belgium
The founding of FIDIC: The founding of FIDIC The first FIDIC Congress convened representatives of seven countries. However, the real founders of FIDIC were the National Associations of Belgium, France and Switzerland. The first FIDIC logo “With Objectivity and Integrity”
The FIDIC consulting engineer circa (1914): The FIDIC consulting engineer circa (1914) “….. is he who possessing technical scientific knowledge and practical experience exercises the profession with full impartiality on behalf of his client and does not receive any remuneration except from the said client.” One year later, in the programme of its 2nd Congress in Bern, Switzerland, FIDIC included the discussion of measures to combat extortion and corruption.
FIDIC in numbers (2003): FIDIC in numbers (2003) 64 National Associations 30 thousand consulting firms Staff of 1 million Fees of 100 billion USD per year
The FIDIC Strategic Objectives: The FIDIC Strategic Objectives Representivity Image Business Practices Globalisation Integrity Sustainability Quality
The global market: The global market The global market is about: change!
The global market: The global market What is the global market looking for? quality integrity responsiveness innovation
Quality: Quality “We’ll tell you what we want and we will hold you responsible to deliver a project that meets all of our expectations. You will be held totally responsible for the performance of the facility.” * Procter & Gamble
Integrity: Integrity “To operate successfully in an increasingly globalised world, while subjected to the competitive pressures of a free market, a firm’s procedures will have to conform to generally accepted best practices. In particular, ethical behaviour toward all the firm’s stakeholders – clients, suppliers, owners, employees and society in general – must be key and visible”. * FIDIC Integrity Management Task Force
Responsiveness: Responsiveness “As a reaction to globalisation and the speed of communications, small and medium size firms should utilise quality and integrity as competitive advantages. Because of their size, these firms are generally more flexible than its bigger competitors and may react more rapidly to meet clients’ needs.”
Innovation: Innovation “Managers must convert society’s needs into opportunities for profitable business. That too is a definition of innovation.” * Peter Drucker
Seminar on Anti-Corruption and Integrity Management, Bahrain: Seminar on Anti-Corruption and Integrity Management, Bahrain Business Integrity Management System, “BIMS”
Slide16: Corruption ……. is defined by Transparency International as: “The abuse of power to achieve a personal gain”.
Types of corrupt behaviour: Types of corrupt behaviour Bribery Extortion Fraud Collusion
Change in world attitude: Change in world attitude A dramatic attitude change has occurred since the mid nineties, when it became evident that corruption is extremely harmful to development.
FIDIC tools for integrity management: FIDIC tools for integrity management Code of Ethics Policy on Business Integrity Policy on Conflict of Interest Representative’s Agreement Business Integrity Management System
Slide20: Business integrity means safe business As a fundamental issue of best practices and capacity building, FIDIC has proposed the development of a system for managing integrity.
Slide21: The integrity management concept calls for an internal system of the consulting firm, designed as an effective tool to prevent corrupt behavior and to encourage integrity. The concept of integrity management
Slide22: FIDIC recommends that: Member firms must have a commitment to integrity through the implementation of a “Business Integrity Management System” (BIMS) involving all levels of management and every employee.
BIMS development and implementation (I) : BIMS development and implementation (I) Principles of integrity management: Leadership Involvement of staff A process approach A systems approach A document process
BIMS development and implementation (II) : BIMS development and implementation (II) Formulation of a “Code of Conduct” (Appendix D) Formulation of a “Business Integrity Policy” (Appendix C) Appointment of a BIMS representative
BIMS development and implementation (III) : BIMS development and implementation (III) Identification of critical processes for integrity compliance - size and structure of the firm - type of clients - nature of consulting services
BIMS critical processes (illustration) : BIMS critical processes (illustration) High Risk Representation Agreements All in countries with TI CPI < 7.0 High Risk Sub-consultant Agreements All in countries with TI CPI < 7.0 Depends on red flags during due diligence Likely direct interaction with government clients Critical Projects New government or private clients Over 2,000 m-hours Sub-consultants involved
BIMS development and implementation (IV) : BIMS development and implementation (IV) Design of integrity assurance procedures - marketing of services - bidding processes - project execution - collection of fees
BIMS components: BIMS components Firm’s rep Corrective actions Monitoring BIMS planning BIMS implem. Firm’s operations Critical processes Procedures Manual Review BIMS records Service delivery Code of C. Int. Policy
Slide29: Integrity Review Checklist (illustration) Marketing Disclosure of firm’s integrity policy - Evidence of formal delivery to client of company brochures stating the existence of BIMS - Integrity policy disclosure as part of the project proposal Potential conflicts of interest - Evidence of having analyzed potential conflict of interest - Evidence of following management procedure in case of potential conflict YES NO 19
Slide30: Integrity Review Checklist (illustration) Contracting Bidding process - Proposal reflects actual firm experience - Resumes of experts reflect real experience - Evidence that the firm did not engage in collusion with other participants - Evidence that the firm did not have unfair competitive advantages over competition YES NO 19
Slide31: Integrity Review Checklist (illustration) Contracting Terms of Contract - Terms of contract reflect the scope offered in the original proposal - Evidence of justifiable reasons in case of changes in terms of contract - Evidence of actions taken in case of irregular practices initiated by client - Evidence of actions taken in case of suspected wrongdoing by associates or subcontractors - Project manager’s signed assertion and evidence of firm’s integrity YES NO 19
Slide32: Integrity Review Checklist (illustration) YES NO 20 Project Execution Adequate Work Team - Evidence of adequate personnel levels and expertise - Existence of detailed terms of reference and contracts for associates and subcontractors Contract Modifications - In case of contract modifications, evidence that adjustments were indicated and justifiable
Slide33: Integrity Review Checklist (illustration) YES NO 20 Project Execution Consultant/Client Integrity Relationships - Evidence of no extortion attempts by client employees during execution - Concrete preventive or corrective measures if attempted - Project Manager’s signed written assertion and evidence of firm’s integrity during process
Contents of the “Blue Book” (I): Contents of the “Blue Book” (I) 1. Introduction 1.1 Background 1.2 FIDIC´S initiative 1.3 Why firms should adopt a BIMS 1.4 The Business Integrity management concept 2. Business integrity management in consulting 2.1 FIDIC and business integrity management 2.2 Business integrity means safe business 2.3 The FIDIC policy 2.4 The principles of business integrity management 3. Developing a BIMS 3.1 Introduction 3.2 A business integrity management system for consulting firms 3.3 Monitoring the business integrity management process 3.4 Reviewing the business integrity management system
Contents of the “Blue Book” (II): Contents of the “Blue Book” (II) Appendix A Definitions Appendix B FIDIC Code of Ethics Appendix C FIDIC policy statement on business integrity Appendix D Model code of conduct for consulting firms Appendix E Business integrity management checklist Appendix F Further reading Appendix C Integrity management org
Slide37: Email address: fidic@fidic.org Website:www.fidic.org FIDIC World Trade Center II P.O. Box 311 CH-1215 Geneva 15 Switzerland Tel: + 41 22 799 4900 Fax: + 41 22 799 4901 FIDIC contact details:
Slide38: The consulting industry remains largely responsible for the planning, design, construction inspection and management of the infrastructure needed to meet the world’s ever-increasing demand for food, water, sanitation, shelter, health services, transportation and energy. It tackles on a daily basis the problems on how to improve people’s lives while preserving natural resources in a world with growing population. Thank you Consulting Engineering - FIDIC
Seminar on Anti-Corruption and Integrity Management, Bahrain: Seminar on Anti-Corruption and Integrity Management, Bahrain Business Integrity Management System, “BIMS”
Cases and dilemmas: servicesincluded in a proposal: Cases and dilemmas: services included in a proposal In a CE proposal it is stated that the client will get three paid trips to the CE offices and will be provided with 5 PCs. The TOR do not explicitly mention these items
Cases and dilemmas: services included in the proposal: Cases and dilemmas: services included in the proposal Is it acceptable to have these statements in the proposal?
Cases and dilemmas: servicesincluded in a proposal: Cases and dilemmas: services included in a proposal After the job is completed the PCs are left with the persons who worked with these equipments during the execution of the project
Cases and dilemmas: services included in the proposal: Cases and dilemmas: services included in the proposal Is it acceptable to leave the PCs with them?
Cases and dilemmas: engaging a representative: Cases and dilemmas: engaging a representative The scope of the rep’s agreement refers to general market intelligence, specific logistic support and staff recruitment. He is rewarded for operational costs + a fee of 3% of CE’s fee of projects awarded
Cases and dilemmas: engaging a representative: Cases and dilemmas: engaging a representative Is this agreement acceptable?
Cases and dilemmas: engaging a representative: Cases and dilemmas: engaging a representative CE wins a contract for capacity building services of gov. staff engaged in rural sanitation. At the same time the rep grows his business by representing a pump manufacturer
Cases and dilemmas: engaging a representative: Cases and dilemmas: engaging a representative Is it acceptable to continue with the agreement?
Cases and dilemmas: no payment for extra work: Cases and dilemmas: no payment for extra work The payment for some agreed extra work causes trouble to the client who asks the CE to waive the fee
Cases and dilemmas: no payment for extra work: Cases and dilemmas: no payment for extra work Should the CE accept not to get payment for the extra work in order to keep a good relationship with the client?
Cases and dilemmas: no payment for extra work: Cases and dilemmas: no payment for extra work The CE decides to refuse to withdraw the fee note and the client approaches the CE telling him that he will lose his job if this is not done
Cases and dilemmas: no payment for extra work: Cases and dilemmas: no payment for extra work Does this new information change the situation?
Cases and dilemmas: suspicion of bribing: Cases and dilemmas: suspicion of bribing A CE employee suspects that a contractor is bribing the client. Suspicion is based in several change orders being accepted by the client at extraordinary high prices.
Cases and dilemmas: suspicion of bribing : Cases and dilemmas: suspicion of bribing Should the CE inform the client’s organisation?
Cases and dilemmas: suspicion of bribing : Cases and dilemmas: suspicion of bribing Does it make any difference if a CE employee has been present when the contractor and the client have discussed fraudulent operations?
Cases and dilemmas: sub-consultant nominated by client: Cases and dilemmas: sub-consultant nominated by client The TOR and the contract identifies a nominated sub-c for data collection services and a fixed payment. After kick off it becomes clear that the sub-c has a family relationship with the Director of the executing agency
Cases and dilemmas: sub- consultant nominated by client: Cases and dilemmas: sub- consultant nominated by client Is it acceptable to pay the sub-consultant for work that he performs?

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